Excerpt:.....contemplated under it, where all the issues have been together and have also been taken up for adjudication during the course of the trial, these must be decided together and the judgment in the suit as a whole must be pronounced by the court covering all the issues framed in the suit......order passed by the subordinate court in exercise of its inherent power under section 151 of the code staying a suit to which provisions of section 10 of the civil p. c. do not in terms apply, we confine as such ourselves to this type of the discretion exercised by the lower court in examining the revisional power of the high court under section 115 of the c. p. c. and not to the other types of discretionary orders.8. on the first question, we are in agreement with the views of the learned single judge that in cases not covered by the provisions of section 10 of the civil p. c. in terms, the court may, in very exceptional circumstances, stay a suit under section 151 of the code as the inherent jurisdiction of the court to make orders ex debito justitiae is undoubtedly affirmed by.....

Judgment:

Singh, J.

1. The following question has been referred by the learned single Judge to a larger Bench viz. 'whether the High Court can interfere sitting in revision with an order passed by a Subordinate Court which is within its jurisdiction,' but which is discretionary in nature and if so, under what circumstances?

2. The circumstances which give rise to the reference above may be briefly stated. The Respondent No. 1 was a teacher under Respondent No. 2, and in that capacity he occupied a quarter of the present petitioner. The respondent No. 2 opened a Model School, a private institution, managed by a Governing Body. The petitioner herein with a view to help the respondent No. 2 placed at its disposal some quarters to be used for the purpose of the said school. The condition was that the aforesaid society, respondent No. 2, would pay to the petitioner standard rent plug Municipal taxes, water and electric charges and that the quarters shall be immediately handed over to the petitioner in case the same was no longer required for the purpose for which it was provided or in case the school was closed. The respondent No. 1 occupied a quarter for which he paid rent to the respondent No. 2, who in turn paid rent to the petitioner as agreed upon. Consequent upon the opening of a Central School by the Govt of India at Sibsagar with a view to facilitate education of the children of the employees of the Oil and Natural Gas Commission, the private school run by the respondent No. 2 was closed down in July, 1974, The respondent No. 1's service was terminated by Respondent No. 2 with effect from 15-7-1974. He was to hand over the quarter to the petitioner but he refused to do so and continued to occupy the same without even paying rent to the respondent No. 2 or to the petitioner despite several demands in this behalf. On 27-9-74 therespondent No. 1 filed a suit. In the court of the Munsiff. Sibsagar, being Title Suit No. 37 of 1974 against Respondent No. 2, Managing Committee members of the said School and the Kendriya Vid-yalaya Sangathan. In the suit, the petitioner was not a party. He claimed a declaration that the decision of the respondent No. 2 dissolving the school was illegal and that the termination of the services was bad in law. It was also prayed that the defendants be restrained by a permanent injunction from giving effect to the decision dissolving the School, He also claimed reinstatement to the post as an assistant teacher in that School with retrospective effect with all benefits from the date of termination. While the suit was pending before the Munsiff. Sibsagar, the petitioner before us filed a suit on 20-5-76 in the same court being Title Suit No. 15 of 1976 against the respondent No. 1 as principal defendant and the respondent No. 2 as a pro forma defendant claiming a decree for eviction of the respondent No. 1 and delivery of khas possession of the quarter and also compensation of Rs. 2,164. 58 for wrongful occupation of the snit quarter. The defendant No. 1, who is the Respondent No. 1 herein, filed a petition before the Munsiff. Sibsagar, for stay of the subsequent Title Suit No. 15 of 1976 pending disposal of Title Suit No. 37 of 1974. The learned Munsiff by his order dated 1-8-1977 stayed Title Suit No. 15 of 1976 in exercise of the inherent power under Section 151 of the Civil P. C. taking the view that the matters in issue in both the suits are substantially same and that it would be an unnecessary harassment to the respondent No. 1 if the said suit was allowed to proceed pending decision in Title Suit No. 37 of 1974. Being aggrieved by the said order, the petitioner who is the plaintiff in T. S. No. 15 of 1976 has come up in revision to this Court.

3. The revision petition was heard by the learned single Judge, B. L. Han-saria. Two questions were formulated by the learned single Judge as arising in the revision, viz. (i) whether the suit can be stayed in exercise of inherent power, and (ii) if permissible and so done, whether the High Court can interfere with the same sitting in revi-vision? The learned single Judge answered the first question in the affirmative,and held the view that in cases not covered by provisions of Section 10 of the Code, the Court in exercise of the inherent power can stay a suit. On the second question, the learned single Judge considered the statement of law made by the Supreme Court on the revisional powers of the High Court under Section 115 of the Code in (i) D. L. F. Housing and Construction Co. v. Sarup Singh, AIR 1971 Sc 2324, and (ii) M. L. Sethi v. R. P. Kapur, AIR 1972 SC 2379. In M/s. D. L. F. Housing and Construction Co. (supra), it was held that while exercising the jurisdiction under Section 115, it is not competent to the High Court to correct error of fact however gross or even errors of law unless the said errors have relation to jurisdiction of the court to try the dispute itself. It was further held that the words 'Illegality' and 'with material irregularity' as used in Clause (c) of Section 115 of the Code do not cover either errors of fact or of law; they do not refer to the decision arrived at but merely to the manner in which it is reached. The errors contemplated by this clause may relate either to the breach of some provisions of law or to material defects of Procedure affecting the ultimate decision, and not to errors either of fact or of law, after the Prescribed formalities have been complied with and merely because the High Court would have felt inclined, had it dealt with the matter initially to come to a different conclusion on the question of continuing stay of the reference proceeding Under Section 30 of the Land Acquisition Act, 1894 pending decision of the appeal, could hardly justify interference on revision Under Section 115 of the Code when there was no illegality or material irregularity committed by the Lower Court.

4. In M. L. Sethi (AIR 1972 SC 2379) (supra) the High Court in revision set aside the orders passed by the trial court directing discovery of the documents and dismissing an application for permission to sue in forma Pauperis. After reviewing some of its earlier decisions the Supreme Court held the orders did not relate to 'illegality or 'material irregularity' in exercise of jurisdiction, as contemplated under Clause (c) of Section 115 of the Code and set aside the order of the High Court. In that case, the Supreme Court referred to the case of Anisminic Ltd. v. The Foreign Compensation Commission, (1969) 2 AC 147, in which the distinction between an error which entails absence of jurisdiction and the error made within the jurisdiction was discussed,

5. In the light of the principles of law laid down by the Supreme Court and the concept of jurisdiction' as interpreted by the House of Lords in Anisminic Ltd. (supra), the learned single Judge formulated the question above mentioned for determination by a larger Bench of this Court as to whether the High Court can interfere in revision with the type of the order passed by the Subordinate Court in exercise of discretion under Section 151 of the Code.

6. As agreed to by the learned counsel of both the parties, we have also heard the Revision petition on merits, and in answering the question formulated by the learned single Judge, we propose to dispose of the petition itself.

7. As the question arises out of the order passed by the Subordinate Court in exercise of its inherent power under Section 151 of the Code staying a suit to which provisions of Section 10 of the Civil P. C. do not in terms apply, we confine as such ourselves to this type of the discretion exercised by the lower court in examining the revisional power of the High Court under Section 115 of the C. P. C. and not to the other types of discretionary orders.

8. On the first question, we are in agreement with the views of the learned single Judge that in cases not covered by the provisions of Section 10 of the Civil P. C. in terms, the court may, in very exceptional circumstances, stay a suit Under Section 151 of the Code as the inherent jurisdiction of the court to make orders ex debito justitiae is undoubtedly affirmed by Section 151 of the Code. See padam Sen v. State of U. P.. AIR 1961 SC 218; and Monohar Lal Chopra v. Rai Bahadur Raja Seth Hiralal, AIR 1962 SC 527.

9. In cases where court has to pass orders Under Section 151 of the Code for ends of justice or preventing abuse of the process of the court, the court cannot, however, overlook the well settled principles of law governing the stay of suits. In such cases also, there must be identity of the subject-matter and field of controversy between the parties in the two suits substantially Chough the identity contemplated andfield of controversy need not be identical in every particular, or at least the court must be satisfied that to allow the subsequent suit to continue would be oppressive or vexatious to the defendant and that the stay would not cause injustice to the plaintiff in the subsequent suit.

10. In Castanho v. Brown and Root (UK) Ltd. and another (1981) 1 All ER 143, the House of Lords was concerned with the question of stay of the proceeding in America for a claim of damage for personal injuries by temporary injunction pending decision in another proceeding for a claim of damage filed by the same plaintiff in a court in England, which arose out of the same transaction. The House of Lords followed the principles which would govern exercise of court's discretion to impose a stay or grant injunction enunciated in the earlier decision in the Atlantic Star (Owners) v. Bonaspes (Owners) (1973) 2 All ER 175 and in Macshannon v. Roc-kware Glass Ltd. (1978) 1 All ER 625, The House of Lords observed:--

'The modern statement of the law is to be found in the majority speeches in the. Atlantic Star (1'973) 2 All ER 175 : 1974 AC 436. It had been thought that the criteria for staying (or restraining) proceeding were twofold : (1) that to allow the proceedings to continue would be oppressive or vexatious, and (2) that to stay (or restrain) them would not cause injustice to the plaintiff (see Scott LJ in St. Pierre v. South American Stores (Gath and Chaves) Ltd. (1936) 1 KB 382 at 398, (1935) All ER Rep 408 at 414). In the Atlantic Star the House, while refusing to go as far as the Scottish doctrine of forum non conveniens, extended and reformulated the criteria, treating the epithets Vexatious' and 'oppressive' as illustrating but not confining the jurisdiction. Lord Wilberforce put it in this way: The 'critical equation, he said, was between 'any advantage to the plaintiff' and 'any disadvantage to the defendant'. Though this is essentially a matter for the court's discretion, it is possible, he said, to 'make explicit' some elements. He then went on (1973) 2 All ER 175 at 194 : 1974 AC 436 at 468-469) : The cases say that the advantage must not be 'fanciful' that 'a substantial advantage' is enough..... A bona fide advantage to a plaintiff is a solid weight in the scale, often a decisive weight, but not always so. Then the disadvantage to the defendant; to be taken into account at all this must be serious, more than the mere disadvantage of multiple suits .....I think too that there must be a relative element in assessing both advantage and disadvantage--relative to the individual circumstances of the plaintiff and defendant.

(Emphasis mine).'

In Mac Shannon v. Rockware Glass Ltd., (1978) All ER 625 at 630 : 1978 AC 795 at 812 Lord Diplock interpreted the majority speeches in the Atlantic Star as an invitation to drop the use of the words 'vexatious' and 'oppressive' (an invitation which I gladly accept) and formulated his distillation of principle in words which are now very familiar.

'In order to justify a stay two conditions must be satisfied, one positive and the other negative: (a) the defendant must satisfy the court that there is another forum to whose jurisdiction he is amenable in which justice can be done between the parties at substantially less inconvenience or expense, and (b) the stay must not deprive the plaintiff of a legitimate personal or juridical advantage which would be available to him if he invoked the jurisdiction of the English Court.'

11. Turning to the question of discretion, in the exercise of power Under Section 151 of the Code to stay a suit, the court has to keep in view the statements of law on the stay of a suit which are well settled, as the court acts upon the assumption of the possession of the inherent power to act ex debito justitiae and to do that real and substantial justice for the administration of which alone it exists. The court is to exercise a judicial discretion. 'Discretion means when it is said that, something is to be done within the discretion of the authority that something is to be done according to the rules of reason and justice and not according to private opinion; Rooke's case; according to law and not humour. It is to be, not arbitrary, vague and fanciful, but legal and regular. And it must be exercised within the limit, to which an honest man competent to discharge of his office ought to confine himself.' See Sharp v. Wakefield (1891) AC 173. Therefore if in the exercise of discretion a Judge has decided it in a manner absolutely unreasonable and opposed to justice, his error amounts to illegal exercise of jurisdiction. There is no court which is entrusted with the power of administering justice without restraint.

12. In M. L. Sethi (AIR 1972 SC 2379) (supra) Mathew J. after referring to the dicta of the majority of the House of Lords in Anisminic Ltd. (1969-2 AC 147) (supra), was of the view that the effect of the dicta in that case is to reduce difference between jurisdictional error and error of law within jurisdiction almost to a vanishing point; the practical effect of the decision is that any error of law can be reckoned as jurisdictional. His Lordship further observed that this case was perilously close to saying that there is jurisdiction if the decision is right in law but none if it is wrong almost any misconstruction of a statute can be represented as 'basing their decision on a matter with which they have no right to deal', 'imposing an unwarranted condition' or 'addressing themselves to a wrong question' and concluded that there is no yardstick to determine the magnitude of the error other than the opinion of the court.

13. In our view, an error in law which is vital in the subject-matter of dispute between the parties and which entails absence of jurisdiction, justifies interference by the High Court in exercise of revisional power under Section 115 of the Code; and indeed, in such a case revisional power has to be exercised by the High Court, to prevent a miscarriage of justice. The exercise of re-visional power does not much depend on whether the subordinate court passed the order sought to be revised in exercise of the inherent power Under Section 151 of the Code. In Vishesh Kumar v. Shanti Prasad (1980) 2 SCWR 1 : (AIR 1980 SC 892), the Supreme Court considered the revisional powers enjoyed by the High Court under Section 115 of the Code, and at para 3, it was observed .--

'3. A schematic analysis of the judicial hierarchy within a State indicates that the High Court, as the apex court in the hierarchy, has been entrusted, not only with the Supreme appellate power exercised within the State but also, by virtue of Section 115, the power to remove in order to prevent a miscarriage of justice, any jurisdictional errorcommitted by a subordinate court in those cases where the error cannot be corrected by resort to its appellate jurisdiction. The two salient features of re-visional jurisdiction under Section 115 are, on the one hand, the closely limited grounds on which the court is permitted to interfere and on the other, the wide expanse of discretion available to the court, when it decides to interfere, in making an appropriate order. The intent is that so serious an error as one of jurisdiction, if committed by a subordinate court, should not remain uncorrected and should be removed and the record healed of the infirmity by an order shaped to reinstate the proceeding within the proper jurisdictional confines of the subordinate court. It is a power of superintendence, and fittingly it has been conferred in terms enabling the High Court to exercise it, not only when moved by an aggrieved person, but also suo motu. While considering the nature and scope of the revisional jurisdiction, it is necessary however, to advert to the prime circumstances that in Civil cases the jurisdiction has been entrusted to the highest court of the State, demonstrating that broadly the order under Section 115 is to be regarded in the absence of anything else, as a final order within the State judiciary.''

14. From the conspectus of the decisions of the Supreme Court and also of the House of Lords in the cases referred to above, in our opinion, whenever a subordinate court goes wrong in law on the vital question either by breach of some provisions of law or by committing material defects in procedure which has resulted in manifest injustice, it goes outside the jurisdiction conferred on it, and its decision can be interfered with Under Section 115 of the Code for lack of jurisdiction, irrespective of the question as to whether such an order was passed by the subordinate court in exercise of discretion Under Section 115 of the Code. It depends on the facts and circumstances of each case and no general principle can be laid down.

15. In regard to the error of law which is so serious as to produce a nullity for lack of jurisdiction, Lord Denning in the case of Pearlman v. Keepers and Governor of Harrow School (1979) 1 All ER 365 observed that the distinction between an error which entails absence of jurisdiction and error made withinthe jurisdiction is very fine, and, so fine indeed that it is rapidly being eroded, The case arose out of the Leasehold Reform Act, 1967, which gave the leaseholder a right to buy the freehold, but only if the rateable value of his house was below 1500. Mr. Pearlman had installed at his own expense a new central heating system and claimed that his rateable value should be reduced on this account. This depended on a few words in Schedule 8 of the Housing Act, 1974. In determining the question as to whether improvement amounts to 'structural alteration or addition' Lord Denning made the observation above, and proceeded that 'When a Judge held that installation of a full central heating system was not 'a structural alteration or addition,' then he went wrong in point of law. He misconstrued those words and that error can be described on the one hand as an error which went to his jurisdiction. If he had held that it was a 'structural alteration or addition,' he would have had jurisdiction to go on and determine various matters set out in the said Schedule. By holding it was not a 'structural alteration or addition,' he deprived himself of jurisdiction to determine those matters. On the other hand, his error can equally be described as an error made by him within his jurisdiction, and it can plausibly be said that he had jurisdiction to enquire into the meaning of the words 'structural alteration' or 'addition,' and that his wrong interpretation was only an error within his jurisdiction, and not an error taking him outside it. Lord Denning then concluded that so fine is the distinction in truth the High Court has a choice before it whether to interfere with an inferior court on a point of law. If it chooses to interfere it can formulate its decision in the words: 'The court below had no jurisdiction to decide this point wrongly as it did. If it does not choose to interfere it can say: 'The court had jurisdiction to decide it wrongly and did so. Softly be it stated, but that is the reason for the difference between the decision of the court of Appeal in Anisminic and the House of Lords.' (Underlining mine).

16. The whole question depends on the facts and circumstances of each case. Lack of jurisdiction may arise in various ways. It may arise in the intervening stage while engaged in a proper enquiry, though it has initial jurisdiction to embark on that enquiry. It may take into account matter which was not directed to take into account or it may ask itself the wrong question influenced by other consideration which ought not to have weighed with him. In such cases it would step outside its jurisdiction. We answer the second question that though the subordinate court has initial jurisdiction to decide a matter, it may result in the lack of jurisdiction where it commits an error of law of such a nature which affects his jurisdiction as pointed out above. Such an order can therefore, be interfered with by the High Court Under Section 115 of the Code. Merely because the order was passed in exercise of discretion would not take away the revisional power of the High Court to interfere with such an illegal order.

17. Keeping in view the Principle of law above, we proceed to examine the impugned order sought to be revised in the present case. The Principle under-lying the provisions of law for stay of a subsequent suit is to achieve finality in the litigation, to prevent the multiplicity of the proceedings and also to prevent conflict of decisions in respect of the same subject-matter involved in two different suits filed by and between the same parties. The principles are embodied in Section 10 of the Code. What is barred under Section 10 is the trial of a suit.

18. In the instant case, from a reading of the pleadings in Title Suit No. 37 of 1974 and the pleading in Title Suit No. 15 of 1976, we find that the matters in issue in both the suits are not substantially the same, apart from the question of the plaintiff not being a party to the earlier suit in Title Suit No. 37 of 1974. The averments made in the plaint in Title Suit No. 37 of 1974 and the reliefs claimed as already referred to have no bearing at all on the claim and relief in the subsequent suit being Title Suit No. 15 of 1976. What was claimed in Title Suit No. 37 of 1974 was that he was entitled to be in service under the Respondent No. 2 as an assistant teacher, his termination of service being illegal. Nowhere it was pleaded that he was entitled to occupy the quarters from whichhe was sought to be evicted in the subsequent suit being Title Suit No. 15 of 1976, so long as he was in service of the Respondent No. 2 as a teacher, assuming for a moment that he is entitled to be in service his termination from service being wrongful. In our view, the question of harassment to the Respondent No. 1 also does not arise. On the contrary, it would cause injustice to the plaintiff when the subsequent suit is stayed. No material disadvantage to the Respondent No. 1 would follow if the said suit is allowed to proceed. Indeed, the stay order has illegally deprived the petitioner of its juridical right to continue its suit against the Respondent No. 1. It has been observed by the Supreme Court in Monoharlal (AIR 1962 SC 527) (supra), the question of issuing an order to a party restraining him from proceeding with the other suit in regularly constituted court of law deserves a great care and consideration, and such an order is not to be made unless absolutely essential for ends of justice. Admittedly it is a case of the illegal exercise of jurisdiction. We are of the view that there is a flagrant violation of the provisions of law governing stay of a suit as discussed above calling for interference under Section 115 of the Code.

19. In view of the discussion above while answering the question as above, we set aside the order of the learned Munsiff impugned herein. The revision petition is allowed. There will be no order as to costs. Send down the records immediately. The learned Munsiff is directed to dispose of the suits without further delay.